Early in the American session, the EUR/USD pair is trading around 1.0498, below the 21 SMA, and within the downtrend channel forming since November 27.

If the euro consolidates below the psychological level of 1.05 in the next few hours, we could expect a continuation of the bearish movement. Thus, EUR/USD could reach 1.0435, 1.0412, and finally 1.0376 (1/8 Murray).

On the other hand, if the euro breaks the bearish trend channel and consolidates above 1.0517, we could expect EUR/USD to continue rising and thus, cover the gap left at 1.0576. Finally, the instrument could reach the 200 EMA around 1.0653.

According to the H4 chart, we can see that the euro is overbought, which means that any attempt to continue rising will be seen as an opportunity to sell.

Our trading plan for the next few hours is to sell the euro below 1.0498 or wait for confirmation above 1.0517 to buy.